LNG project only 40 per cent complete

The completion date for the construction of a jetty to facilitate a floating LNG storage and regasification unit (Fsru) at Vasiliko is likely to be pushed back once again, Energy Minister George Papanastasiou said on Friday.

During a meeting with representatives of China Petroleum Pipeline Engineering Co Ltd, which, among other companies, won the contract for the infrastructure works at the terminal, Papanastasiou said that contrary to predictions putting the percentage of completed works by October at 90 per cent, the real figure is 40 per cent complete.

Last month, during a visit to the facilities, representatives of Metron SA, another company involved in the infrastructure works, also lamented serious delays and ongoing issues leading to a delay in the delivery of the entire project.

In addition to that, in February the government approved the contractor’s request for a further increase in the price by €25 million due to the rise in the prices of materials. The government in turn is claiming compensation from the contractor for the delays in completing the project.

Papanastasiou was speaking following his visit to Egypt where he accompanied President Nikos Christodoulides and also met his Egyptian counterpart Mohamed Shaker El-Markabi, who reaffirmed his wish to cooperate with Cyprus on energy matters and to visit the island in the near future.

Papanastasiou also had a meeting with the Egyptian Minister of Petroleum and Mineral Resources Tarek El Molla, during which they discussed a broader cooperation between two countries in the field of hydrocarbons.

The Minister had told the Cyprus Mai a week ago that the new government was taking a more assertive stance on the €300 million LNG project, which has been plagued by a series of delays in the past few years.

The previous deadline set for completion was October 2023. That target – probably intended for public consumption – was announced only a month ago. To put things into perspective, it was way back in December 2019 when Cyprus signed the contract with a consortium led by China Petroleum Pipeline Engineering Co Ltd.

Papanastasiou said last week that eealistically “we’re now looking at end of 2023 for completion, or beginning of 2024”.

The LNG terminal will include the Fsru, a jetty for mooring it, , a jetty-borne gas pipeline and related infrastructure.

The project has secured a €101 million grant from the EU under the Connecting Europe Facility (CEF) financial instrument. The rest of the financing comes from the European Investment Bank and the European Bank for Reconstruction and Development.

The Fsru – the purpose-built vessel that will convert imported LNG into gaseous form so that it can be fed into the Vasilikos power station to generate electricity – has been the biggest stumbling block.

The vessel is currently in dry dock at Cosco’s shipyard in Shanghai. Papanastasiou said it will be delivered by July this year.

The vessel should begin its voyage from China to Cyprus in June and take around a month to get here.